Inflation Is Already Here

Image by Getty Images via @daylifeIan Cooper
This is just too stupid not to comment on.

Federal Reserve Chairman Ben Bernanke just said: "We're not in the business of trying to create inflation, our purpose is to provide additional stimulus to help the economy recover and to avoid potentially additional disinflation, which I think we all agree could also be worrisome."

How does this guy still have a job?

First, the Fed is in the business of creating inflation. It's their goal. Their target is always set around +2% every year.

Second, Bernanke is trying to convince us that inflation is well below the 2% target.

Third, he's not even looking at the right numbers. The only way inflation isn't a worry is if he's looking at core CPI numbers, which exclude volatile food and energy.

Something big is happening in the markets. And yet "official" numbers are telling us everything is fine — leading me to believe there's a huge disconnect between CPI and the world the rest of us live in.

Honestly, Bernanke's insanity would be laughable, were it not so economically destructive. It's absurd that he would argue inflation is under control when the cost of everything has spiked...

Inflation has arrived

And for Ben to not see that, I'm worried. It all reminds me of 2007, when he saw "little chance" of the subprime housing mortgage problem spreading to the general economy...

Just take a look at these commodity prices and tell me — with a straight face — that inflation isn't here:

* Gold is at all-time highs above $1,400.
* Silver is at a 30-year high.
* Cotton is running, with prices being passed on to consumers.
* Sugar is at 30-year highs, and we're likely to see food prices increase because of it.
* Oil is running well above $85.
* Grain markets are exploding: December wheat, last checked, was just under $7.30. Corn was at $5.88 per bushel, and soybeans are rocketing well above $12.80 a bushel.

In the last year alone, palladium and cotton have doubled. Corn, silver, and wheat are up close to 60%.

In the months since Bernanke told us QE1 would not jeopardize the stability of prices, the price of oats is up 40%.

Orange juice is up 45%... rice is up 50%... coffee is up 60%... copper is up 70% More...